YouTube is believed to be working on an ad-supported streaming service that would allow users to stream TV shows, TV movies and TV channels for free. The Wall Street Journal report says Google is in talks with entertainment companies and testing the concept with some of them. The result would be similar to apps like Pluto TV which offers streaming TV programs from content providers like Paramount Movie Channel, TV Land Drama and other channels.
As noted The Verge, companies like Vizio and Roku sell TVs that offer similar streaming services, but both companies make more money from advertising and subscription commissions than they do from selling their hardware. Vizio and Roku, based on their latest revenue reports, earn $27 and $44 per year per user. The newspaper says an anonymous YouTube spokesperson has confirmed that testing is underway and the service may roll out more widely this year.
Free ad-supported YouTube TV service could look like Pluto TV app
Among the content providers YouTube is in talks with are Lionsgate and A&E. The latter owns History Channel, FYI and Lifetime. Google is reportedly asking for a 45% reduction in ad revenue. YouTube recently signed a deal with NFL Sunday Ticket and games will air on YouTube TV and YouTube Primetime Channels starting in the 2023-24 season.
Google has around 5 million subscribers to YouTube TV which offers over 100 live TV channels for $64.99 per month. Google may decide to market the free, ad-supported service under the YouTube TV brand. Google is also looking to increase the amount of popular content on its YouTube Shorts service which offers short videos using a vertical format. The company shares its advertising revenue with the creators of the platform, which gives them a higher salary than TikTok for using their content.
The biggest trend in streaming services right now is to offer a free or low-cost, ad-supported level of service. Netflix, Peacock, Disney+ and HBO Max all have ad-supported service tiers and it looks like YouTube TV will be next.
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